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The Department for Education and Skills (DfES) said the school was struggling through lack of pupils — a situation that was likely to continue.

Jim Knight, the schools minister, said it was one of 45 independent schools closed on quality grounds over the past three years. It had not been shut because of the police raids.

The school opened in September 2003 as an independent day school for Muslim boys aged 11 to 16, with nominal annual fees of £1,000.

The £3 million building with 100 rooms is set within 54 acres. The main house and grounds were often used as a weekend retreat for Muslim families from London.

Officers from Sussex Police were deployed around the school for most of last September as anti-terror units searched the buildings and grounds.

At the time, there were only 11 pupils attending the school, though more than 20 teachers and other adults were living there. Nobody was arrested.

The searches coincided with raids in London during which 12 people were detained at a London restaurant and another two elsewhere. Several men have been charged in connection with the investigation into an alleged network of terrorist recruiters.